Watch the video, or read the Blog Post below.
PayPal or Stripe? A lot of you might be wondering which online payment platform will do your business good and which one you are better off without.
If you’re wondering why I created this video, I had a really huge problem with PayPal when I was scaling my business, and it got me wondering as to should I permanently stop using it for my business. If you’ve encountered this issue before, are currently dealing with it, or are expecting to scale your own business some time in the future, then boy, do we have a treat for you!

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In this video, we are going to analyze PayPal’s contribution to my overall sales and see if my business would actually be better off without it!
Context: What Happened With PayPal
So here’s a little overview of why I wanted to compare these two payment gateways. Between April and May of 2018, I decided to scale my business up, which would eventually allow me to generate more sales and therefore gain more profit. Sure enough, it did allow my business to grow, and within that period, I was able to increase my gross sales by up to 46% (as seen on the image below; refer to April and May 2018 sales).
Now, naturally, when you are business-minded like I am, you would think that this is it: the beginning of something even bigger and better. And of course it is; you’re already processing almost twice as much transactions! Yes, the future does seem bright!
That is until one day, I opened up my PayPal account and noticed a red dot over the notifications icon. I quickly switched over to my email and found this on my inbox:
As with Windows’ “blue screen of death”, I receive this terrible news from PayPal!
“We’ve temporarily limited what you can do with your account until our review is completed.”
Basically, this statement is just a sugarcoating to what they actually want to imply: a portion of my funds was put on hold due to reasons unknown. And it’s not just a small portion; take a look at how much I am restricted to withdraw!
As if things can’t get any more ridiculous, my on-hold funds is WAY MORE THAN what I can withdraw!
Upon further research, though, I found that PayPal holds funds for security purposes; the management found my sudden huge boost in sales a bit odd to the point that in order to avoid any trouble between the merchant and the customer, they had no other option but to reserve funds should there arise refund requests or disputes.
Still, though, unless you have another source of income, or at least a backup plan, having more than 90% of your total funds being kept on hold is undoubtedly a huge inconvenience. “How can I pay my suppliers? How can I pay for my team’s services?”
PayPal vs. Stripe
With this much inconvenience being placed on my shoulders, you would think that I should remove PayPal from my payment options permanently. But as a businessman, you wouldn’t want to make rash decisions without knowing first how it would affect the entirety of your generated sales and income. And anyway, I wanted to see how my business would go if I didn’t have a PayPal payment option at all. So without further ado, here is a detailed analysis of my cash flow, and with it, we may hopefully get some interesting insights and information.
Analyzation and Testing
Analysis of the cash inflow based on the customers’ chosen payment option is shown below:
Upon analyzation, I found that a whopping 67.44% of my customers are sending payments via credit and debit cards. However, the fact is that there are still a lot of them who are using PayPal’s services. Heck, if you know how to play the numbers right, that 32.56% may already be your capital, with the rest being pure profit. And so, despite the inconvenience it brings in terms of the management’s limitations to my funds, it is impossible to say that it is insignificant and therefore can be omitted from my payment options.
Removal of PayPal
I decided to perform an A/B test to determine my customers’ purchasing activities if I did take PayPal off my system once and for all.
Oddly enough, there wasn’t much of a difference when I removed PayPal from my payment options. Even when I scale up, a $0.39 deficit in my revenue is but an insignificant impact to the overall profit I will probably make. Actually, in what I would call a strange turn of events, more people converted into paying customers when PayPal was taken out of the system — 0.13% more made a purchase, which equates to a 0.32% overall improvement in sales.
Of course, this test was subject to many different external factors such as the customers’ budgets, availability of the product of interest, etc.
Let’s Wrap It Up!
PayPal’s limitations in terms of funds withdrawal is a huge setback for business owners, especially for those who have not another source of income or a backup plan. However, it does not necessarily mean that the platform should be permanently disregarded as a payment option, as there are still many people who prefer using the platform over having to share their credit card information to the online space.
So, the verdict. Did my business do better without the help of PayPal? Yes. Am I better off without it? Probably. Will I be permanently removing it from my payment options? No. Why?
Yes, Stripe alone can handle all your online payment needs, but having multiple payment options will definitely give your business an edge, as potential customers who do not have credit cards still have a chance to make a purchase on your site.
Before we end this post, I would like to invite you to my monthly membership group, The Pirate Club, where you can get everything you would need to build a successful online store. By joining in and becoming a pirate yourself, you gain access to the following:
- The Pirate Academy;
- The Pirate Product App;
- The Pirate Community; and loads more!
Intrigued? The Pirate Club is now open with an early-bird pricing plan, so be sure to grab this super affordable deal before it expires!
If you have any more questions about PayPal, Shopify, Stripe or anything regarding this video, feel free to personally contact me via the Contact Form HERE. You can also leave your comments and feedback below, and our team over at WagePirate will definitely get back to you with a response. For more reviews, news and updates, don't forget to subscribe to our YouTube channel!
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